The energy company GDF Suez, in which the French government has a 35% stake, requested the increase, which will take effect April 1. The increases have been steady, and this last measure will make rates 20% higher than a year ago, and 60% since 2005.

The article specifies that most of the natural gas that GDF Suez imports is based on 20-year supply contrats with countries such as Norway, Algeria and Russia. Pricing for gas prices takes into account the evolution of the euro-dollar exchange rate, the price of heating oil and crude oil and the price of natural gas listed in Amsterdam (or the APX-ENDEX).

Read more in the original article, “Les prix du gaz augmentent de 5,2% le 1er avril, de plus de 20% depuis un an.”

France is unfortunately known for its high taxes. One of the recent fiscal measures, le bouclier fiscal or the tax cap (a.k.a. tax shield) limited all direct income taxes to 50% no matter the income bracket. I wrote about this recently on Bonjour Paris. Those who defended it said it lightened the load of taxes, but those opposed to it reckoned it protected the wealthy while not contributing to reducing the deficit and debt.

Recent debate lead up to today’s decision, announced today by Prime Minister François Fillon, to end the policy. (However, some sort of tax cap will remain in place, at an unspecified percentage, for the less well-off, which make up 52% of the beneficiaries). You can see the French article from Le Point at the link above, and the video from BFM TV below.

PARIS—French Prime Minister François Fillon Thursday confirmed the government intends to abolish a tax shield that has become a controversial hallmark of Nicolas Sarkozy’s presidency.

Mr. Sarkozy decreased the threshold of the tax shield shortly after coming to power in 2007 so that no taxpayer pays more than half their income in taxes. But his ratings have hit record lows and the tax shield has become a thorn in his side as many voters see it as a measure benefiting the wealthy few.

“We have to face up to reality: the tax shield has been misunderstood, and the crisis has probably made our citizens more sensitive to some of its effects,” Mr. Fillon told a conference, organized to discuss the reform of property and capital taxes that Mr. Sarkozy has promised for the first half of 2011.

The tax shield was designed in part to limit the impact of France’s wealth tax, which Mr. Sarkozy also intends to reform before the presidential elections in May 2012.

The government says it will either do away with the wealth tax completely or significantly modify it. Mr. Fillon said Thursday said the reform will free 300,000 households from the wealth tax.

Yet the government is insisting the reform must have a neutral impact on public finances at a time when France is fighting to rein in deficits. If the wealth tax and the tax shield are abolished, the government will need around €3.2 billion ($4.44 billion) to make up the shortfall.

He also ruled out a variety of options that have been suggested in recent months. The government will not tax gains on the sale of main residences, will not reverse its reduction of inheritance tax, and will not introduce an additional tax bracket, Mr. Fillon said.

Mr. Fillon also said the reform of capital and property tax is one of the reforms necessary for greater tax convergence in the euro zone.

European leaders are negotiating a competitiveness pact for members of the euro zone. Some countries have balked at Franco-German proposals that they fear would compromise their sovereignty in sensitive areas like pensions and salaries.

Mr. Fillon said France and Germany should aim to harmonize corporate taxes, starting with the base of these taxes before looking at the rates.

I wrote in this week’s Bonjour Paris about these topics and more. You can read the article here. You can see my profile and other articles on this page.

You can read more about the G20 meeting of Finance Ministers in Paris in Le Point (in French). The Financial Times also covers the story (if you can’t read story on 1st try because of subscription matters, you can google the article title and usually find an accessible version).

As you have probably seen on the news, snow and cold weather has hit large parts of Europe, including a good portion of France. Although Paris has been spared most of the snow, it is still quite cold here, in the low 20’s at night (-7 Celsius), more like an average Chicago winter day. But in other parts of France, my friends in Grenoble, Lyon, Annecy, Eastern France all report anywhere between 8 and 16 inches of snow, so it’s quite a significant snowfall. England and Germany have been hit hard, as well as Poland, Italy and several other countries.

CNN also covers the storm in Europe, and flights at airports like London Gatwick, Frankfurt and Munich have been significantly disrupted with cancellations and major delays (NB their 3rd picture is Lyon’s Place Bellecour). BBC writes that flights have been severely disrupted as well in Brussels, Vienna, Dusseldorf, Amsterdam, Geneva, Berlin, London Heathrow and Prague. Over 3,000 people in high-speed German trains had to spend the night in the train as they were blocked by weather. They too have pictures of the storm in Europe (once again with 4th picture in Lyon).

In this week’s Bonjour Paris, a great resource, I write a piece analyzing French President Nicolas Sarkozy’s new cabinet after the reshuffling. It talks about changes, Prime Minister François Fillon, the French economy, Bettencourt scandal, Sarkozy’s 10 big challenges for the remainder of his administration and 2011 Senate elections and 2012 presidential election. Excerpts below.

Just an FYI: there are strikes planned for Nov. 23 against the now lost-cause of retirement reform, but they are not expected to cause much disruption. Nonetheless I will update my blog Nov. 22 with any relevant information.

As promised, President Nicolas Sarkozy finally carried out the long-awaited reshuffling of his cabinet. This is a traditional move by French presidents during their administrations, regarded as an effort to regain popularity and credibility after facing approval-rating problems. Mr. Sarkozy has certainly had those.

The Economist cites a poll by Ifop that puts Sarkozy’s approval rating at 36% and that of Prime Minister François Fillon at 55%. This is one principal reason Fillon was kept in office – defying the modern trend of presidents changing prime ministers once or twice per administration. In fact, as the same article notes: “If he keeps his job until 2012, M. Fillon will become the first prime minister in modern times to have survived a president’s entire term.” This is due in part because “his calm, reassuring style makes him the antidote to the hyperkinetic president.”

So the fact that Fillon stayed on makes this both an uneventful reshuffling and an exceptional one. You can see a group photograph and learn the names of all cabinet members on the Elysée website here. You can also read coverage of it in the New York Times. Some of the most notable changes come at Defense Minister (old: Hervé Morin; new: Alain Juppé) and Foreign Minister (old: Bernard Kouchner; new: Michèle Alliot-Marie). Overall, it is a government that is more right of center, and one of the most unsurprising changes was at Budget Minister, where François Baroin replaced Eric Woerth. Woerth had been entangled in the Bettencourt scandal. But Nicolas Sarkozy supported him fully in a speech to France about his reshuffling.

Sarkozy will face 10 big challenges during the second half of his term, according to weekly Le Point: strengthening his UMP party unity for 2012; regaining approval ratings; keeping the French Senate to the right (Senatorial elections are in September 2011 and could swing left); reforming fiscal policy; financing aid for the elderly; supporting employment; improving France’s image abroad; getting support from students and the youth with convincing plans; and mastering the internet.

The challenge now is implementing further reforms – on the heels of the unpopular retirement pension reform now law – to improve the French economy while remaining popular enough to have a chance at reelection in 2012. But there are already many candidates from several parties waiting in the wings, most notably IMF head and Socialist Dominique Strauss-Kahn and former Prime Minister conservative Dominique de Villepin.

I write for Bonjour Paris and this week have this article about the French retirement reform passing. Be sure to check out Bonjour Paris.

Excerpts from my article below:

After two months that saw many days of strike action (sometimes marred by violence) by unions, schools and others opposed to the French government’s retirement reform, it has become law. President Nicolas Sarkozy had given ground on certain areas, such as easing pension requirements for working mothers and those who work in arduous, labor-intensive jobs.

But he did not give in to union demands to keep the retirement age at 60 and the age for full pension at 65, instead remaining determined to raise these to 62 and 67, respectively. Business newspapers give an in-depth look into the details of the pension law (in French).

In the end he succeeded, despite strike action, because of many factors including a special parliamentary procedure that did not allow for debate on each amendment and thus facilitated voting on the proposed bill in the Sénat and Assemblée Nationale. Another reason is that strikes in France do not have the power they used to, with a legal minimum service in schools and in transportation making life less difficult for everyday people. The Paris metro operated during the heat of the strike.

He succeeded in this reform where past French presidents attempting it had failed because of giving in to strike pressure. But what has this done for his popularity and chances of being re-elected in 2012?

In the midst of this lack of popularity, Sarkozy is planning a TV address on Nov. 18 to announce a cabinet reshuffling, with Prime Minister François Fillon being kept in place (having been reappointed to the position today after resigning from it only yesterday) but other ministers to be changed, a traditional move by the presidency to regain popularity. But the unions are still calling for strike action Nov. 23. Although aware that they will likely accomplish nothing against what is already law, they are already preparing action on other measures to keep momentum going, like work insurance, complementary pensions, youth unemployment problems, etc.

For now, Sarkozy has won the battle. But will he win the war? We’ll have to see. The definitive answer will come in 2012.

I write for Bonjour Paris and this week I have a piece about the French government cabinet reshuffle with updates on the strike movement (which seems to be dying down as the retirement reform bill is set to become law). Check out other articles on the site as well, on such subjects like French wine, hotel recommendations, Obama-Sarkozy relationship and more. Excerpts below from my article. I’ll be sure to update you on any strike situation that could affect you.

Indeed, the strikes on Nov. 6 saw significantly less participation, with unions divided about the future of the movement. Figaro asserts that the movement has loss all momentum. Le Point writes that as turnout was lower than previous days, tension is high among unions about the future. They will decide Monday on whether or not to carry out further action. I will let you know what they decide.

In the wake of several weeks that have seen strikes around France in protest against French retirement reform proposed and enacted by President Sarkozy’s government, the “movement” has calmed down significantly since the somewhat violent clashes between youth and police in Lyon and elsewhere a couple weeks ago.

Where do we stand now? The pension reform law has been voted by Parliament (both Assemblée Nationale and Sénat) and is now awaiting final approval by the Conseil Constitutionnel (the Constitutional Council, a bi-partisan board that evaluates the constitutionality of proposed laws) before becoming official law.

The unions called for a strike on Saturday Nov. 6, but following the relatively low turnout for protests compared to past demonstrations, they are thinking about the future of other days of action. Even if the reform becomes law, despite its “injustice” in the eyes of unions, they say they would continue to demonstrate and protest in policies linked to purchasing power, working conditions and other issues for them. The French Left is now considering actions to capitalize on the frustration of the streets, according to Libération, to prepare for the 2012 presidential elections.

Meanwhile the government is preparing for a reshuffle of ministers, with rumors surrounding the Prime Minister François Fillon and whether or not he will be replaced by Jean-Louis Borloo (current Minister of Ecology and Energy, Sustainable Development and Town and Country Planning).

In the conservative Figaro, a poll finds that nearly 87% of respondents want Fillon to stay on. Indeed, his level of popularity has remained higher than Sarkozy for a long time now. Many French see him as intelligent, calm and composed as opposed to the hyper-active and micro-managing President.

One thing is for sure. France is the midst of significant social change that will have an impact in years to come, and for many French, 2012 could not come soon enough. But there is a lot of time between now and then, and Sarkozy could make a come-back. That looks unlikely at the moment.

Following my post on US election coverage in France, the media is now reacting to the results: a convincing Republican victory in the House of Representatives, in state legislatures and governors races, whereas the Democrats held on to a majority – though not fillibuster proof of 60 – in the Senate. If you want inside DC news, I recommend Politico. BBC has a quality special report on the elections as well. The Economist also features an insightful debate about the outcome of the elections and what they could mean for US politics in the next couple years:

On the French side, Le Figaro has a special report covering the people, the events and the US political system with insight. In an interesting poll asking readers if they are satisfied by the US election results, the responses are almost split: just over 50% say “no”, begging the question if readers of the Figaro are happy that Obama suffered a political setback, that the US government will be split or if they are relieved Democrats held on to the Senate. It would be better to have some context here.

Al-Qaida chief Osama bin Laden threatened France recently with repercussions for alleged offenses against Islam (fighting in Afghanistan and banning the Muslim burqa in France, etc.). French intelligence services are taking this threat seriously and are working with various western intelligence agencies to counter the threat.

Meanwhile French resources can be found here, and at Figaro. Francois Bayrou, a center politician from the MODEM party, has asked that President Sarkozy inform French political leaders about the exact nature of the threat.

This follows threats in Europe including against France that were highlighted recently.

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